Leading business publications the Financial Times and The Economist have recently voiced their support for transparency laws on both sides of the Atlantic that will help reduce corruption in developing countries and increase the resources spent on poverty reduction.
They join the voices of 180,000 ONE members who have called for policy-makers to stand firm against lobbying by a small group of oil and mining companies who want to maintain the secrecy status quo (you can still sign our US and European petitions).
In its editorial today the Financial Times writes:
“In the past two years, the US Congress and the European Commission have acted boldly to clear up the murkiness in which natural resource companies’ payments to governments around the world are clouded. Lobbying efforts aimed at overturning this progress on both sides of the Atlantic should not be allowed to succeed.”
The Economist has taken a similar line. In a leader article on February 11th it wrote:
“The mining firms… should support Western efforts to impose greater transparency on the industry. This will drive away at least some of the cowboys and make competition more open. Time to side with the sheriff.”
Both publications have highlighted how important it is that the proposed US and European Union laws are fit for purpose, and deliver information that genuinely empowers civil society in developing countries to hold their political leaders accountable for the revenue received. The Financial Times writes:
“Many extractive companies are happy to live with [public reporting], but the most recalcitrant demand changes. On both sides of the Atlantic the fight is on to reshape the reporting rules so that whatever is published is less informative. In particular, it is suggested that the laws’ call for reporting project-by-project details be watered down with overbroad definitions of “project”. There is no justification for this: most payments to states are calculated on a project basis anyway, so publishing such detail is no great burden.”
They are correct that aggregating payments at a country level would not deliver the same benefits in terms of accountability. If only payments of over $1 million were disclosed – something that extractive companies are lobbying for – local communities would be excluded from accessing all the information relevant to projects in their vicinity.
The Economist also examined the claim that disclosure rules would be in contravention of domestic law in some countries, but find that:
“Businesspeople struggle to produce examples of how local restrictions on publishing confidential contract details could clash with transparency requirements elsewhere. Contracts in developing countries typically have a clause permitting disclosures that are required by the company’s home country and stock exchange. Nor does greater disclosure seem to hurt competitiveness. In 2011 Angola awarded several new deepwater oil concessions to firms covered by Dodd-Frank. No oil company has so far cited increased openness as a material risk in its SEC filings.”
This spike in attention on this issue from the world’s leading financial media shows the intense scrutiny on the US and EU law-making process. Watering down key details will undermine efforts to reduce corruption and end the ‘natural resource curse’. Both the Financial Times and The Economist – known for their business-friendly coverage – have looked at the evidence and concluded these laws are good for the long-term interests of companies and good for economic development in poor countries. That is a winning formula that policy-makers should now heed.